New CMS report delves into hospital consolidation trends
Information released publicly for the first time this week examines trends in changes of ownership over the past six years.
Industry leaders believe transparency and competition are important factors in improving the quality and affordability of health care. Information released publicly for the first time this week is expected to shed light on the consolidation of hospital ownership.
The Centers for Medicare & Medicaid Services on Wednesday released data about mergers, acquisitions, consolidations and changes of ownership from 2016 to 2022 for hospitals and nursing homes enrolled in Medicare. The U.S. Department of Health and Human Services also is issuing a related report using this data to examine trends in changes of ownership over the past six years.
“Today, for the first time, we are releasing data on the impact of hospital and nursing home consolidation for people across our nation,” HHS Secretary Xavier Becerra said. “By improving the quality of reporting by hospitals and nursing homes on ownership and consolidation, we also advance President Biden’s agenda to promote competition, lower health care costs for American families and protect patients.”
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Ownership changes have been less common for hospitals than for nursing homes over the past six years. There were more than 3,000 changes in ownership among skilled nursing facilities but just 347 for hospitals. Part of the disparity can be explained by the greater number of nursing homes — more than 15,000, compared to about 6,000 hospitals.
During the period, 4.6% of hospitals were sold. Small hospitals with 26 to 64 beds were more likely to be acquired than larger hospitals, and hospitals with the greatest negative margins were over twice as likely as those with the highest positive margins to be acquired (8.6% vs. 3%).
Only one critical-access hospital was acquired during the study period, and urban hospitals were more likely to be acquired than rural hospitals (5.6% vs. 3.3%). Long-term care hospitals were the most likely to be acquired, while psychiatric and “other” hospitals were the least likely.
The data reveal wide ownership variation by state. For instance, 19% of hospitals (14 out of 73) in South Carolina were sold during this period, while most other states had fewer than 4% of hospitals change ownership.
Information now available at data.cms.gov can help researchers, enforcers and the public analyze trends and issues in health care markets and more specifically, provide insight into how the ownership of health care providers affects consumer costs and outcomes. The CMS expects to release updated change-of-ownership data on a quarterly basis
“Hospital and nursing facility consolidation leaves many underserved areas with inadequate or more expensive health care options,” CMS Administrator Chiquita Brooks-LaSure said. “This new data gives researchers, state and federal enforcement agencies, and the public new opportunities to examine how mergers, acquisitions, consolidations and changes of ownership impact access to care, care quality and prices as a way to enable greater transparency and insight into the hospital and nursing home industries.
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